News Analysis 3

Singapore On Top

Competition to be the best country to do business with is heating up in South East Asia. As reported by BBC News World Asia, the World Bank has ranked Singapore among other countries from all around the world as the best country to do business in for the ninth successive year in a row (BBC News World Asia 2014). The World Bank used specific metrics within its survey that included a time table that looked at the duration from start to finish for a business to open its doors to go out of business, the construction permitting process and finally the tax environment of the country’s most business friendly city (BBC News World Asia 2014).  

The metrics appear to cover realistic values a business person or organization would find critical in looking for a location to operate however the story does not talk about whether the World Bank also identified specific industry related data in its research leading to this report. The report does point to several areas that remained conceivably unchanged from previous years, for example regions opening the doors to loose regulatory controls and the embrace of better business practices seemed to show growth in some countries where others that tightened legislative boundaries slipped backward in the rankings (BBC News World Asia 2014).

In parallel to the World Bank report, the country of Malaysia reportedly published their 2015 budget that included plans to invigorate exports and create an environment for strong foreign direct investments according to Bernama News (2014). From this report, it appeared that Malaysia has plans for building a more robust place for doing business alongside their neighbors to the south. Much of the partnerships and collaborations are coming from United Arab Emirates companies the article says Bernama News (2014). The Tun Razak Exchange recently entered into a project forecast to cost nearly $5.5 Billion in US dollars to establish the City of Kuala Lumpur as a global leader in international finance, trade and services the report explained (Bernama News 2014). Considering that Singapore has recently been identified as the top country to do business with, Malaysia will likely find it easy to glean convenient sources for information and techniques from this world class business entity.

The origination of the sources of investment points to healthcare projects, financial and food producing industries however they do not mention anything about other markets like energy and manufacturing as this would directly relate to the quality of life of average citizens. Energy costs and jobs that produce goods relate directly to developing countries and access to a higher quality of life and simply were not discussed in either article which may beg the question about the extent of poverty in these countries and how these regions may be exploiting other nations that do not have access to these amenities that are probably taken for granted in developed countries. As these regions become more viable as global leaders, social and humanitarian responsibilities will likely take precedence in decision making about future markets and growth, defense, and foreign aid. These countries will have to figure this into their calculations when planning for continued expansions in the future.

References

Bernama News (2014). Malaysia To Build Even Stronger Firms To Woo More Investments. Retrieved from http://www.bernama.com/bernama/v7/bu/newsbusiness.php?id=1080552

BBC News World Asia (2014). Singapore tops World Bank business ranking for ninth year. Retrieved from http://www.bbc.com/news/business-29813383

News Analysis 2

Market and Currency Balance

Asian markets appear to be coordinating efforts to grow together between China and South East Asia. In parallel stories, both BBC News World Asia and Asia One Singapore discuss Markets that are working toward integration and global expansion. According to BBC News World Asia, the Hong Kong stock Exchange known as HKEx, closed the day lower by 5% recording a six month low (BBC News World Asia, 2014). The issue stems from the plan for the HKEx to combine with the Shanghai stock market making for one of the regions most anticipated market developments however the plan will now be placed on hold until further notice as it was previously slated for opening later in the month as the Hong Kong Shanghai Market Connect (BBC News World Asia, 2014). It makes sense that the market dropped based on the uncertainty as this tends to be a common reaction by all markets when the future seems to be revealing unknown stability and growth.

The effort to join the two markets will open the borders for multiple brokerage firms anxious to gain access to markets that are normally closed to each other and the rest of the world (BBC News World Asia, 2014). The report further explains that this is the first major step in connecting Chinese markets to the rest of the global financial system (BBC News World Asia, 2014).

Among other trading news AsiaOne Singapore reports that China and Singapore will now begin trading currency between the two nations (AsiaOne Singapore, 2014). These countries want to trade currency with each other in order to reduce the cost of doing business with each other said the report in fact this move between the two markets has been described as a “game changer” because the Yuan was not tradable for over thirty years (AsiaOne Singapore, 2014).

With the news spreading about the markets combining within China as well as news of developing relationships with other Asian Markets through currency trading that was essentially non-existent several decades earlier it is clear that doing business in Asia should have a positive outlook contrary to today’s reports. It would make sense that this period is simply an example of growing pains attributed to the pace at which the markets are growing and the opportunities that are emerging that were never there before.

A deeper look at the reports adds that political pressure to make changes to home governments may cause set-backs in the pace of these coming changes. In Hong Kong, student protesters have built a month long encampment demanding democratic elections of their leaders (BBC News Word Asia, 2014). With these protests the markets have reacted by slowing down. Additionally initiatives to collaborate on environmental programs, exchange programs for government officials as well as education expansion sound like leveling efforts between the governments to counteract negative global perception associated with the civil unrest among students in Hong Kong (AsiaOne Singapore, 2014).

Advisers are likely monitoring media outlets not even mentioned in these reports to direct leaders in making decision about how to proceed with actions between the two countries and markets. From a business perspective perception can make or break the market on any given day.

References

BBC News World Asia (2014). Hong Kong-Shanghai Stock Connect delay hits bourse shares. Retrieved from http://www.bbc.com/news/business-29782593

AsiaOne Singapore (2014). S'pore, China launch direct trading of currencies. Retrieved from
http://news.asiaone.com/news/singapore/spore-china-launch-direct-trading-currencies

News Analysis 1

Asian Economy

The state of the economy in Asia has been on an incline in recent months with the announcement of China surpassing the Gross Domestic Product (GDP) of the United States. According to the Huffington Post the low cost of living in China and other Asian countries compared to the United States creates wealth among people who only a decade ago were simply living with a lower quality of life (Huffington Post, 2014). The Chinese GDP just barely outpaced the United States from $17.6 trillion as compared to $17.4 trillion.

Asian entrepreneurs and business people have enjoyed new success and have been faced with dealing with corruption and unethical practices in their growing economies. The research shows evidence of this according to BBC News World Asia, former Vietnamese Ocean Bank chairmen, Ha Van Tham was just arrested with accusations pf lending fraud (BBC News World Asia, 2014). Mr. Tham who is estimated to be worth several billion dollars in personal assets in real estate and hotel properties has been relieved of his title and duties as Chairmen by the Vietnamese Central Bank. Corruption will likely continue to surface as the economy creates opportunities for new people living and operating businesses in Asia. The news story does discuss in detail how Tham was exposed nor does it lend any ideas to how he did what he was accused of as this is probably an attempt to sensor the public from knowing what actually happened in this particular case.

From a different perspective, outside of corruption and negative sentiment the growth of populations expanding beliefs and religious faiths is reaching from Malaysia to Japan in the economy with the news about food products now being more readily available across borders. Bernama News just issued a report on the import of halal products from Malaysia to Japan, opening the doors for access by Muslim athletes as they head to the Olympics in 2020 (Bernama News, 2014). The agricultural industry in Japan will likely grow and create new opportunities as Aeon Group, a massive retail organization operating eighteen hundred locations will bring halal products into its stores (Bernama News, 2014).

What the reports does not talk about is the demographic details of how many Muslims already live within Japan and how many will likely continue to purchase halal products outside of the athletes that companies are marketing to. The Olympics being hosted by Japan is nearly six years away and should not be expected to drive the market for this kind of product on a long term basis. The news article does not explain other possible outlets for agricultural food processors to use the certifications that will be required in order to produce food on their equipment. The market will probably open up to other types of religious based food requirements like Kosher with this as a gateway into the market but still does not show the demographic into who will be active in the market so additional data should be sought before making final decisions about the pulse of the market based on this article.

References

BBC News World Asia (2014). Vietnam business tycoon Ha Van Tham arrested for 'fraud'. Retrieved from
http://www.bbc.com/news/world-asia-29769252

Bernama News (2014). Japan To Import Halal Products From Malaysia. Retrieved from http://www.bernama.com/bernama/v7/bu/newsbusiness.php?id=1079608

Huffington Post (2014). China's Economy Just Overtook The U.S. In One Key Measure.

Retrieved from http://www.huffingtonpost.com/2014/10/08/china-gdp-tops-us_n_5951374.html